Written By Darshan M (Grade 12)
Bharat Sanchar Nigam Limited, or BSNL for short, used to be one of the most important telephone companies in India. It was started by the Indian government in the year 2000 to provide many different services, like home phone lines, mobile phone connections, and internet services. But as time went on, BSNL started having more problems and became less helpful to the government. Let us understand why that happened, the difficulties BSNL faced, and what it means for the Indian government overall.
In the early 2000s, BSNL stood as an important pillar of the Indian telecom landscape, having considerable influence in both landline and mobile services. With its extensive infrastructure, backed up by government support, BSNL was able to extend its reach to the most far remote areas of the nation. This capability positioned the company as an essential partner in the government’s idea to bridge the connectivity gap across India. BSNL’s extensive network infrastructure, coupled with its access to government funding, has enabled it to provide services at highly competitive rates, thereby playing an instrumental role in making telecommunications accessible to the average Indian. Additionally, the company has significantly increased the government’s revenue through dividends and taxes and remained as an important asset to the central government.
BSNL started off doing well, but by the mid-2000s, it began to struggle. This happened for several reasons. When India opened up its phone services to private companies like Airtel, Vodafone, and Reliance Jio, these companies quickly learned what people wanted and used new technology to offer better services. They were more flexible and could make decisions faster, which helped them take the lead. On the other hand, BSNL had a harder time keeping up because it was stuck in old ways of doing things, didn’t come up with new ideas, and took too long to make decisions.
BSNL, a phone and internet company, started having funding problems because it couldn’t compete well with other private companies. They were spending more money to run their business, their technology was getting old, and they weren’t making as much money as before. By the late 2010s, things got really bad for BSNL, and they owed a lot of money. This happened because they had trouble keeping up with all the new changes in the phone and internet world and didn’t manage their business as well as they could have.
The landscape of the telecommunications industry changed dramatically with the introduction of Reliance Jio in 2016. Its bold pricing strategies and complimentary voice calls disrupted the market, compelling BSNL to reduce its tariffs significantly. This response not only undermined BSNL’s revenue base but also deepened the company’s financial struggles, pushing it further into the trap. BSNL is a company owned by the government, and sometimes it has a hard time making decisions quickly because there are many rules to follow. This can slow things down when they need to move fast in a changing market. While other private companies quickly started offering 4G and 5G services, BSNL has struggled to start its own 4G network, which makes it harder for them to compete with those other companies in providing phone and internet services.
BSNL has long regarded its workforce as one of its most valuable assets, boasting thousands of dedicated employees across the nation. However, this once-prized strength has gradually transformed into a considerable liability. The company’s expansive workforce, combined with human resource practices, has resulted in soaring wage expenses that now account for a substantial share of its overall costs. Furthermore, concerns have arisen regarding the productivity of this workforce, as many employees remain underutilized, hindered by either insufficient workload or outdated skill sets.
Some phone companies spent a lot of money to make their networks better with new 4G and 5G technology, but BSNL couldn’t keep up. Because they didn’t start using these new technologies quickly, they lost many customers and their place in the market. People want faster internet and better connections, but BSNL is still using old systems, which makes it hard for them to compete with other companies. The Indian government has extended crucial financial assistance to BSNL to ensure its survival, encompassing bailouts, financial packages, and spectrum allocations. While this support has successfully shielded BSNL from potential collapse, it has, unfortunately, fostered a growing dependency on government aid, transforming the company into a significant financial burden on the central administration.
As we start 2024, BSNL is facing some tough challenges. Even though the government has tried to help the company with new plans, BSNL is still losing a lot of money, using old technology, and is having a hard time competing with private companies. The help from the government is putting a lot of pressure on public money. Over the years, the government has spent a lot of money, which could have been used for other important projects, to keep BSNL going. Unfortunately, these efforts haven’t shown good results for the company.
BSNL has witnessed a gradual decline in its market share over the years. In contrast, private operators have been swiftly broadening their user base, leaving BSNL behind with customer retention. As we enter 2024, the company’s presence in the mobile segment has become minimal when measured against its rivals, while other telecom companies have finished 5G coverage in major cities and towns, BNSL is set to roll out 4G for villages and towns. BSNL’s delay in the deployment of 4G services has posed a significant challenge for the company. Although BSNL has unveiled ambitious plans for the introduction of 4G and 5G services, these initiatives remain in their early stages, leaving the company trailing behind its competitors in terms of network quality and coverage. This technological shortfall has, regrettably, reduced customer confidence in BSNL.
BSNL, a big company, is having some tough problems that need to be fixed quickly. To make things better, they are giving workers a chance to retire early, but this hasn’t helped enough. They still have to pay a lot of money for salaries, and not everyone is working as well as they could. Also, because people are worried about what will happen to the company in the future, they are feeling less happy at work, which makes it even harder for them to do a good job and help customers. The public’s perception of BSNL has unfortunately diminished over time. Once regarded as a steadfast government service provider, BSNL is now perceived as an inefficient enterprise struggling to maintain its relevance. This shift has significantly impacted the company’s brand value, complicating efforts to attract new customers and retain the loyalty of existing ones.
When BSNL is not doing well, it causes big problems for the government. The government has to spend a lot of money to help BSNL stay as a company, which means that public funds are diverted to save a telecom company and not infrastructural projects. This is especially tricky because the government needs to be careful with its money and make sure it doesn’t spend too much. People are starting to think that the money used to help BSNL could be better spent on things that help everyone more.
BSNL is really important because it helps people in faraway places get phone and internet services, even when private companies don’t want to because they don’t make enough money there. If BSNL keeps having problems, it could make it harder for the government to make sure everyone in India has access to these services, especially in areas that don’t have good connections. This might make it even harder for people living in the countryside compared to those in the cities.
BSNL was a giant in its era and did very well as a government enterprise. But as times have changed the same company is struggling to compete with private telecom companies, made some bad money choices, and hasn’t kept up with new technology. Even though the government has tried to help BSNL improve, those efforts haven’t worked very well, and it’s costing a lot of money. Now, the government has a tough decision to make: they can keep helping BSNL, which might take money away from other important things, or they can make big changes to the company or let a private company take over. This decision is important because it will affect telecom services and the country’s economy and politics. In short, BSNL’s situation shows how challenging it can be to run government companies in a world that’s changing quickly. The government needs to think carefully about whether to keep supporting BSNL and what is best for everyone in the country.
Featured Image Courtesy – Gadgets 360
